Compliance

ICCC Response to Media Questions about Transport

The Independent Consumer and Competition Commission (ICCC) is responsible for the regulation of Public Motor Vehicle (PMV) and taxi fares in the country and sets the maximum PMV and Taxi fares for all declared routes nationwide. PMV and Taxi operators are to charge commuting consumers fares approved by ICCC.

ICCC Commissioner and CEO Paulus Ain said PMV and Taxi fares are regulated by ICCC under Section 21 of the Prices Regulation Act (PR Act).

“In the National Capital District market, it is evident that the demand for PMV services is higher than supply. This market situation is a contributing factor that forces PMV operators to over- charge commuters. PMVs also fail to observe certain service standards, such as the completion of routes or serving a route which they are not licensed to do so and the practice of overcharging by PMV operators is an on-going concern.”

“We have investigated and prosecuted a number of offending PMV operators through the Courts. These operators were fined and warned by the Courts to respect and comply with the fares set by the ICCC.”

In addition Mr. Ain said the ICCC has on numerous occasions issued public notices on the approved fares, released media statements regarding the position of the Commission on PMV and Taxi fares; provided tips to commuters via the media on how to lodge a complaint; and advised the public of the outcome of the Court decisions.

“We have and are working with other relevant stakeholders to strengthen our enforcement efforts and powers. We will continue with these efforts and explore other options to effectively address this on-going area of concern.”

“For example, prior to the establishment of the Road Transport Authority (RTA), we have previously liaised with the Department of Transport (DoT) on the possibility of a joint ICCC-DoT prosecution and suspension of PMV licenses by the Department for those found guilty by the Courts for over-charging passengers. We have also provided inputs to and supported DoT’s effort to amend a suite of its legislations, regulations and guidelines. This includes changes to the rules on Traffic Rules for Passenger and Goods Transport. One of the aims of this exercise is to ensure that the Department, as the licensing authority, is equipped with adequate enforcement powers to take action against offending PMV operators. The ICCC will continue to further this and similar initiatives with the RTA.”

Mr. Ain said the ICCC welcomes the proposed new premium transport services for NCD by the RTA and NCDC.

“We perceive this proposal as a pro-competitive intervention as it will increase the number of private operators currently in the market. We are not aware of any talks to eliminate or do away with private operators therefore we expect the relevant authorities to retain the current private PMV operators. The ICCC would support steps taken by relevant authorities to tighten the licensing conditions to ensure current and future private PMV operators improve their service standards and adhere to public health rules and regulations.”

“Given PMV fares are fixed by the ICCC, the ICCC also supports measures that would increase competition amongst existing PMV operators as this can result in operators competing on non-price terms. This can entail operators improving the quality of their service by regularly cleaning their buses, replacing old seat covers and or seats and potentially replacing old PMV buses with new ones.”

Mr. Ain said the ICCC is not privy to the intentions of the RTA and NCDC in regard to the recent advertisement for Expression of Interests (EOI) to contract private operators but notes that the steps taken by RTA and NCDC are generally consistent with their respective mandates aimed at addressed a public good.

“The ICCC is also aware that the proposed private operators will offer premium services on special routes approved by the RTA; but on an initial trial basis to test if the service would be feasible before a final investment decision is made to roll this out on a full scale. Whilst the ICCC is supportive of interventions by relevant authorities aimed at benefiting consumers; it will monitor this development closely to ensure that the fares for the proposed premium PMV services are assessed objectively and carefully; and that the contractual arrangements put in place comply with the competition provisions under the ICCC Act.”

The ICCC is still in discussions with relevant stakeholders and once a final decision is made on the route(s) and type of services, the ICCC will be involved in setting the PMV fares for the approved route(s) and services. Since the proposed new PMV operations would be of a superior service, it is likely that the proposed service would target a specific group of consumers who are willing to pay a higher fare to experience a superior PMV service.

Mr. Ain said the ICCC believes that this arrangement will create/introduce a new dimension in the way PMV services are structured and licensed for the benefit of consumers.

“The ICCC understands that the proposed PMV service will service a different market to that serviced by the current PMV operators given the proposed service would operate on new routes; with potential for there to be minimal overlap between the routes. ICCC has not received any
indication from other centers, apart from NCD, concerning the provision of the proposed premium services for special routes.”

ICCC currently sets PMV and Taxi fares in accordance with its Final Determinations set out in the “2014 Final Report for PMV and Taxi Fare Review” for routes which have been approved and gazetted by the then NLTB. Demand for transport services in most provinces throughout PNG is higher than supply, therefore, ICCC will continue to play an important role in the industry to ensure consumers are protected by regulating the price of PMV and Taxi services. However, it is important that all regulatory bodies of the transport industry continue to work together to ensure approved fares and other regulations such as the PMV and Tax licensing conditions set by the RTA and public health policies enforceable by NCDC (and others) as the delegated municipal authority are strictly enforced at all times.

Unfortunately, there are no quick fix solutions to the issues of overcharging in the absence of other alternate affordable and reliable public transportation service where consumers can exercise their right to choose.

Mr. Ain said if there was, this would allow the transport market to correct itself to some extent in so far as influencing operator behaviour and quality of service.

“There are good laws governing the transport sector but unfortunately some operators continue to disregard these laws. Enforcement and prosecution by relevant agencies like the ICCC serves only a small part in resolving the issue unless PMV operators voluntarily change their behaviour.”

“The ICCC will continue to perform its role. Other relevant agencies also have a role to play to inform and educate the public, including the media.”